Failed to adequately consider actual expenditure: Chhattisgarh HC sets aside AFRC fee order reducing charges at private medical colleges

Raipur: Noting that hostel, mess, and transportation charges cannot be reduced without properly examining their actual expenditure, the Chhattisgarh High Court has set aside the existing fee determination for two private medical institutions and directed the authorities to reconsider the charges.

The observation was made by the court while hearing petitions filed by Raipur Institute of Medical Sciences and Shri Balaji Institute of Medical Sciences challenging the recommendations of the Admission and Fee Regulatory Committee (AFRC) and the consequential state government orders which directed the determination of charges and refund of alleged excess amounts collected from students.

Single Bench Justice Amitendra Kishore observed that although the institutions had been given opportunities to submit their financial records, the committee's decision did not show that the documents and expenditure details had been properly examined before fixing the permissible charges.

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Therefore, the bench directed the competent authority to consider the actual student strength and hostel occupancy for the relevant academic years, along with expenditure on facilities and the distinction between fixed and variable costs.

“While undertaking the fresh exercise, the competent authority shall consider, inter alia, the actual student strength and hostel occupancy for the relevant academic sessions, the expenditure towards hostel, mess and transportation facilities, salaries, electricity, maintenance, fuel, infrastructure, hygiene, transportation, staff and other relevant operational expenses, together with the supporting documents produced by the petitioners,” the judge observed as per Indian Express report. 

The matter is related to Shri Balaji Institute of Medical Sciences, which had proposed annual hostel and mess charges of Rs 3 lakh per student and transportation charges of Rs 2.5 lakh. However, the AFRC reduced these amounts to Rs 78,059 and Rs 13,719, respectively.

The committee had taken the decision following complaints of excessive fee collection and alleged profiteering by the private medical institutions.

Challenging the decision, Advocate Jitendra Singh, along with Nishant Shokeen, Shalini Kashyap, Rashmipriya and Anant Amrit Raj, appearing for the petitioners, argued that the revised charges did not adequately account for their actual expenditure on infrastructure, staff salaries, electricity, maintenance, fuel, hygiene and other operational costs.

The institutions further challenged the committee’s jurisdiction to determine these charges, arguing that its regulatory powers were intended to prevent profiteering and capitation fees rather than arbitrarily replace the fee structure proposed by private unaided institutions.

Opposing the petitions, the state government and the AFRC submitted that the institutions had been given several opportunities to provide supporting documents but had failed to provide complete details justifying the proposed charges.

However, the High Court observed that merely providing an opportunity to submit documents or appear before the committee was not sufficient. The authority was also required to examine the material placed on record before reaching an adverse conclusion.

"The petitioners had also placed material concerning the actual number of students availing the hostel and mess facilities during the relevant academic sessions. The determination made by the respondent Committee, however, does not demonstrate that the aforesaid material was examined in its proper perspective before arriving at the permissible charges," the court said in its October 26 order.

Further, the court emphasised that a decision involving a finding of excess collection and a direction to refund money must establish a rational connection between the evidence on record and the conclusion reached. The authority must explain why it accepts or rejects the institution’s financial particulars.

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